Visa's Moat Faces Growing Pains as Payments Landscape Evolves

Visa's economic moat has been built over decades through its network effect. The company processes over $4 trillion in payment volume annually and has a client Net Promoter Score of 76. However, as payments shift towards digital wallets, account-to-account transfers, stablecoins, and AI-driven commerce, the question arises whether Visa's network remains valuable.

The company is adapting to these changes by expanding its services beyond traditional card networks. Its value-added services revenue grew 34% in constant currency in the third quarter to $3.8 billion, with a focus on issuing, acceptance, risk, and security businesses.

Visa is also investing in new technologies such as stablecoins and AI-powered shopping. The company launched its Visa Stablecoin Platform and is building infrastructure around stablecoin payments and tokenized deposits.